Correlation Between Sun Peak and Dynasty Gold

Can any of the company-specific risk be diversified away by investing in both Sun Peak and Dynasty Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sun Peak and Dynasty Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sun Peak Metals and Dynasty Gold Corp, you can compare the effects of market volatilities on Sun Peak and Dynasty Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sun Peak with a short position of Dynasty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and Dynasty Gold.

Diversification Opportunities for Sun Peak and Dynasty Gold

-0.32

Correlation Coefficient

Sun Peak  Dynasty Gold

Very good diversification

The 3 months correlation between Sun and Dynasty is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Dynasty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasty Gold Corp and Sun Peak is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sun Peak Metals are associated (or correlated) with Dynasty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasty Gold Corp has no effect on the direction of Sun Peak i.e., Sun Peak and Dynasty Gold go up and down completely randomly.

Pair Corralation between Sun Peak and Dynasty Gold

Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the Dynasty Gold. In addition to that, Sun Peak is 1.37 times more volatile than Dynasty Gold Corp. It trades about -0.02 of its total potential returns per unit of risk. Dynasty Gold Corp is currently generating about 0.05 per unit of volatility. If you would invest  13.00  in Dynasty Gold Corp on December 20, 2024 and sell it today you would earn a total of  1.00  from holding Dynasty Gold Corp or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sun Peak Metals  vs.  Dynasty Gold Corp

Sun Peak Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Peak Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Dynasty Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dynasty Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dynasty Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sun Peak and Dynasty Gold

The main advantage of trading using opposite Sun Peak and Dynasty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Peak position performs unexpectedly, Dynasty Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dynasty Gold will offset losses from the drop in Dynasty Gold's long position.

The idea behind Sun Peak Metals and Dynasty Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.